Week commencing 5 February 2018

In today's bulletin

Property, Planning and Regeneration

New local authority funding package approved

Parliament approved a new funding settlement for local authorities in England on 7 February, claiming that the £200 billion available to them over the period 2015-2020 will result in a real term increase in available resources over the next two years.

Additional funding announced by the Secretary of State for Housing, Communities and Local Government, the Rt Hon Sajid Javid MP, includes £150 million for authorities that provide adult social care and a further £16 million for the rural services grant.

Local authorities fearful over finances

The majority of local authorities in England are concerned about their financial sustainability with nearly all planning to raise council tax and charges over the next twelve months, a new survey has revealed. Published on 8 February by The MJ and LGiU think-tank, the ‘State of Local Government Finance Survey 2018’ found in a poll of senior decision-makers that 80 per cent of authorities were fearful over the future of local government finance, including council leaders and chief executives.

Nearly all councils (95 per cent) surveyed expected to increase council taxes and charges in the next year to boost balance sheets, while two-thirds will need to dip into their cash reserves.

Growth in UK house prices stunted at 2.2 per cent

The annual growth of UK house prices slowed to 2.2 per cent in January, the market’s lowest rate since July 2017, according to recent figures from the Halifax House Price Index released on 7 February.

The bank’s latest data reveals that the average price of a house in the UK stands at £223,285, down by 0.6 per cent from the previous month, marking the second consecutive month that prices have fallen, following a 0.8 per cent decrease from November to December 2017. Prices were unchanged on a quarterly basis.

New year fails to buoy UK housing market

New buyer enquiries declined nationwide for the tenth consecutive month in January, the ‘RICS UK Residential Market Survey’ has revealed. Released on 8 February, the survey of chartered surveyors suggests that sales of premium properties valued between £500,000 to £1 million have been hit hardest by tough market conditions.

While prices continue to edge higher at a national level, a divergent regional picture has seen prices fall in London and across the South East, whereas the North West of England, Northern Ireland and Wales posted the strongest price growth.

National strategy for older people’s housing needed

Older people need more help with housing to enable them to live independently, a new report by the Communities and Local Government (CLG) Committee has concluded. Published on 9 February ‘Housing for older people’ calls for a national strategy to tackle the issue and argues that the National Planning Policy Framework should be changed to encourage more development of accommodation for older people.

The report also says the Government needs to recognise the link between homes, health and social care, and recommended that the new national strategy is linked to the forthcoming social care green paper.

Transport

Road Investment Strategy enters next phase

Highways England should be “more holistic” in its approach to expenditure, according to the Chartered Institution of Highways and Transportation (CIHT). With the Government’s consultation on its latest Road Investment Strategy (RIS2) – ‘Shaping the future of England’s strategic roads’ – ending on 9 February, CIHT pushed for the current system of operational and capital expenditure to be merged and considered together.

Both the RAC Foundation and the Campaign for Better Transport reacted positively to the consultation and welcomed Highways England’s focus on maintaining the current network alongside big infrastructure investment and “headline grabbing enhancement projects”. The closure of the consultation period marks the end of the Government’s research phase for the strategy that will cover the period 2020-2025.

All rail companies must join ombudsman

The licences of rail operators will be modified by the end of this year to make their participation in the Office of Rail and Road’s (ORR) ombudsman scheme mandatory.

It was announced on 8 February that all rail companies operating in the UK will be required to join the independent ombudsman scheme that is being developed by the Rail Delivery Group, which is seeking to drive up standards across the industry. The ORR wants to assure passengers that their complaints will be treated freely and independently.

Learn from abroad to transform UK infrastructure

Vital aspects of UK infrastructure policy could be transformed by following examples set by other wealthy nations, a report released on 6 February by the Institute for Government has claimed. ‘How to transform infrastructure decision making in the UK’ suggests that competing needs and perspectives should be balanced to improve the outcomes – namely time, quality and cost – of British infrastructure policy.

To meet these objectives, the think tank argues for creating a ‘Commission for Public Engagement’, reinstating the role of Commercial Secretary to the Treasury and increasing the independence of the National Infrastructure Commission.

Finalised figures from 2016 show that the transport supply sector overtook energy supply as the biggest emitter of greenhouse gases in the UK. The Department for Business, Energy and Industrial Strategy (BEIS) published a report on 6 February showing that over a quarter of greenhouse gas emissions came from the transport supply sector in 2016, while emissions from energy supply decreased by 17 per cent from 2015, owing in large part to a decrease in the use of coal.

The report also revealed that the UK’s overall greenhouse gas emissions decreased by five per cent when compared to 2015.

Energy and environment

Renewables’ share of energy market increasing

Almost one third of Britain’s energy came from renewable sources during the third quarter of 2017, official figures from BEIS show.

The data, released on 8 February, indicates that 30 per cent of electricity came from wind, bioenergy, solar or hydroelectric sources, which represents a year-on-year increase of 4.6 per cent. This is the second-highest documented figure, just 0.7 per cent behind the record level set in Q2 2017.

Offshore wind capacity soars in Europe

A record year saw Europe’s offshore wind capacity grow 25 per cent in 2017, according to statistics published on 6 February by industry body WindEurope. The UK and Germany led the way in the completion of 13 new offshore wind farms across the continent, including Hywind Scotland, the world’s first floating offshore wind farm.

Europe now has over 4,000 turbines operating across 11 countries, but the industry remains heavily concentrated geographically, with 98 per cent of capacity generated by the northern European countries of the UK, Germany, Denmark, the Netherlands and Belgium.

Nationalising water industry could cost £90bn

Renationalising the water industry would cost £90 billion, equivalent to the entire education budget or twice the annual NHS wage bill, according to the Social Market Foundation. Released on 5 February at the request of the water industry, the think tank’s study also found that forcing through nationalisation at a lower cost would jeopardise investment in other sectors because of private sector concerns over risks to their assets.

It has been claimed by the Labour Party that the nationalisation of the water industry would not cost taxpayers.

Other News

70 per cent chance of interest rates hike this May

It would be “no great shock” if interest rates were to be doubled this year, according to the Bank of England’s Deputy Governor, Ben Broadbent. Mr Broadbent was speaking on 9 February following last Wednesday’s Monetary Policy Summary meeting that left financial markets indicating a 70 per cent chance of a rate increase this spring.

According to a report published today by the Resolution Foundation, while an increase in rates does raise the possibility of increasing the “debt distress” faced by some, the recent surge in consumer borrowing in the UK has largely been driven by wealthier households, making the UK relatively well-placed to deal with a rise in rates.